Dow signs LAO ethylene off-take deal from planned US cracker

18 March 2013 12:36[Source: ICIS news]

LONDON (ICIS)--Dow Chemical has signed an initial agreement for long-term ethylene off-take from its new US Gulf Coast cracker for a linear alpha olefins (LAO) unit planned by a joint venture between Japan’s Idemitsu Kosan and Mitsui & Co, the US-based chemicals major said on Monday.

The Japanese partners announced their new US LAO joint venture and plans for a 330,000 tonne/year unit earlier in the day.

Dow said that the joint venture would “contribute significant capital” for rights to supply LAOs to its performance plastics business, without givingdetails. LAOs are used a comonomers throughout that business.

Dow also did not give details of the proposed LAO plant or of the performance plastics production expansions that it also announced on Monday.

Construction and start-up of the LAO units is targeted at 2016, Dow said, although a production location and a final investment decision has yet to be made. Front end engineering (FEED) for the plant will be complete in 2014, it said.

Dow said that its plans for a new 1.5 mt tonne/year ethane cracker at Freeport, Texas are progressing with detailed engineering and the purchase of long lead time equipment having been approved. Supply to the Idemitsu/Mitsui joint venture will be mainly from this cracker.

Dow is also lifting ethane cracking capability at its Plaquemine, Louisiana, site. It restarted its cracker in St Charles, Louisiana, in December 2012.